If a Remax franchisee materially defaults on the franchise agreement, does Remax Regional have the right to terminate other franchise agreements between the franchisee or their Owners and Remax Regional or its Related Parties?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
You will be deemed to be in material default of an essential condition of this Agreement in the event of the occurrence of any of the specific defaults listed in Subsections 13.B., 13.C., and 13.D. below. You acknowledge and agree that the occurrence of any such material default will constitute just and good cause for termination of your rights under this Agreement, or any other franchise agreement between you or your Owners and REMAX Regional and any of our Related Parties, and that our right to terminate this Agreement based on any such material default is reasonable and that such provisions are lawful requirements of this Agreement.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, if a franchisee is in material default of their franchise agreement, Remax Regional has the right to terminate not only that agreement but also any other franchise agreements in place between the franchisee (or their Owners) and Remax Regional or its Related Parties. This provision underscores the interconnectedness of all franchise agreements a franchisee or their Owners may have with Remax Regional.
This clause means that a default on one Remax franchise agreement can trigger a domino effect, leading to the termination of all other Remax franchises held by the same franchisee or their Owners. The FDD emphasizes that the occurrence of a material default constitutes just and good cause for such terminations, and that this right is considered reasonable and lawful under the agreement.
For a prospective Remax franchisee, this highlights the importance of maintaining compliance across all franchise agreements with Remax Regional. A failure to meet the obligations of one franchise could jeopardize their entire investment portfolio with Remax. Franchisees should carefully review the default provisions in their agreements and ensure they have the resources and capabilities to meet all requirements to avoid triggering this clause.